Media owners threaten legal action against NewsCorp/BSkyB merger

BT, Guardian Media Group, Associated Newspapers, Trinity Mirror, Northcliffe Media and Telgraph Media Group have formed a “media alliance” opposing the proposed merger on media plurality grounds.

A spokesman says the alliance “deeply regrets” the fact that culture secretary Jeremy Hunt looks set to clear the deal and that its proposed undertaking to spin off Sky News to address concerns about media plurality is “pure window dressing”.

He adds: “It has been well-documented by former Murdoch editors that arrangements of this kind, including those put in place to protect the independence of the Sunday Times and Times, have proved wholly ineffective. Smoke and mirrors will not protect media plurality in the UK from the overweening influence of News Corporation.

“In addition, the undertaking does nothing to address the profound concerns that the takeover would give News Corporation greater power to restrict or distort competition through cross-promotion, bundling, banning rivals’ advertisements and distorting the advertising market with cross-platform deals.”

The alliance says it will contest the proposal and is considering taking legal action against NewsCorp.

However, with the culture secretary stating he does not intend to refer the bid to the Competition Commission, the merger looks likely to go ahead.

Culture secretary Jeremy Hunt, speaking to the BBC, said: “I myself wanted to address the concentration of media ownership. These are legally binding, legally forcing undertakings.”

Those undertakings include that Sky News must have an independent chairman. Currently James Murdoch is the non-executive chairman and will not be able to continue his role.

Hunt adds the undertakings also include that adherence to the broadcasting code is part of the articles of the assocation of the company.

He adds: “That means impartiality, which is one of the things people like about Sky News at the moment, will be in the articles of association.”

Formal oppositions need to be raised by 21 March, when the public consultation period ends.

Andy Pearch, co-director at Media Sense says the UK media sector will be “transformed” should the merger go ahead.

He says: “A company claiming the biggest national newspapers, the most powerful broadcasting provider and its broadband services as well, serving all the key media communications channels, is transformational.”

Bob Wootton, director of media and advertising and advertiser body ISBA, says advertisers are already speculating how NewsCorp’s renewed media power could affect the marketing industry should the deal be cleared.

He says: “On one level, advertisers are saying the merger is not a problem because an integrated media owner could be more consistent to deal with. On the other hand, others are concerned NewsCorp could become awfully big and potentially nasty.”

But Wootton adds it is too early to speculate on today’s announcement alone.

“Today’s news is just a milestone on the way to progress,” he says.